Why these 4 shares are getting smashed today


It has been another busy day for investors with profit results dominating the headlines. The S&P/ASX 200 (Index: ^AXJO) (ASX:XJO) has managed to claw back early losses but is still trading around 0.3% lower to 5,550 points.

Four shares that have disappointed investors today, include:

RCG Corporation Ltd (ASX: RCG)

Shares of the athletic clothing and footwear company have plunged more than 10% today, despite reporting a 142% increase in FY16 net profit after tax (NPAT). The result was boosted by recent acquisitions and solid same store sales growth but it appears investors may have been expecting slightly better results. Nevertheless, RCG expects another strong year ahead and is targeting annualised underlying group EBITDA of $90m – an increase of nearly 50% over the prior corresponding period.

Myob Group Ltd (ASX: MYO)

Shares of MYOB have fallen more than 8.5% today, despite reporting first half results that exceeded prospectus forecasts. The accounting software company posted an 11% increase in revenues and 14% increase in pro-forma EBITA to $82 million. As highlighted here, however, investors may have been left disappointed with the 8% growth generated from paying small business users over the period. This is well below the growth rates of competitors XERO FPO NZX (ASX: XRO) and Reckon Limited (ASX: RKN).  Investors may also be nervous ahead of the release of 346 million shares from escrow after today’s market close.

Iluka Resources Limited (ASX: ILU)

Shares of the mineral sands miner have dropped by around 7% today after reporting a first half loss of $20.9 million and cutting its interim dividend in half to 3 cents per share. Despite increasing sales volumes by 15% over the period, Iluka was impacted by lower mineral prices, higher non-production cash costs and reduced income from iron ore royalties. Investors would have also been disappointed to learn that the government in Sierra Leone has raised concerns over its recent proposed takeover of Sierra Rutile Ltd. Iluka’s management did not provide earnings guidance for the remainder of the year but noted it will update the market as developments occur.

Breville Group Ltd (ASX: BRG)

Breville shares have dropped by as much as 8.7% today after the appliance maker warned that FY17 trading conditions will be increasingly challenging and competitive. Despite the early share price slump, investors have slowly warmed to the company’s FY16 results that showed a 9.4% increase in sales and 7.5% increase in NPAT. North American sales were once again particularly strong with challenging conditions experienced in Australia and New Zealand. Interestingly, Breville will increase its spend on product development and marketing from 8.4% of net sales to 12% of net sales in an effort to boost sales over the medium term. Shares of Breville are currently trading around 1.5% lower to $7.82.

It is vital to avoid shares that could harm the returns of your portfolio. Click here to find out about three shares that you need to avoid.

3 Rotten Shares to Sell, and 1 to Buy Today

After a double-digit rally for the ASX since 2016 lows, investors should be on high alert. You'll find a full rundown below of 3 shares we think you should avoid today plus one top pick worth buying, even if the market turns south and the RBA keeps rates at an "emergency low." Simply click here to uncover these stocks.

Motley Fool contributor Christopher Georges owns shares of RCG Limited. The Motley Fool Australia owns shares of Xero. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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